Five months after the 2004 Budget, a survey has shown that one in five small businesses are suffering from its effects, despite claims that it was designed for business.
...one in five small businesses are suffering from its effects....
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The survey from accountants, Tenon, shows that:
- 19 per cent of businesses with a turnover of up to £1 million say it has had a negative effect on their business.
- More than two-thirds of businesses say the new introductions by the Chancellor have made little difference.
- Just seven per cent of the 500 businesses polled across England and Wales said the Budget had a positive effect for them.
Andrew Hubbard, Director of Taxation at Tenon said: "The long-awaited attack on the tax advantages of small companies was launched this March. Although it didn't appear to be as bad as we had initially anticipated, this could be one reason why small businesses are speaking out against the Budget, as it has affected thousands of small enterprises across the country. To make matters worse, small businesses also still have to deal with the IR35 and Section 660A rules.
"We are surprised that the imposition of a 19 per cent rate on distributed profits has not had an even more negative impact on the very smallest companies. These businesses, earning profits of less than £50,000 were affected by this and have either disincorporated or have faced further steep tax rises."